Thursday, August 3, 2023

Exact Sciences: $32M Settlement re Date of Service Rule

 I noted recently that Exact Sciences had settled a case with Dr Niles Rosen regarding qui tam ligitation (here).  

Exact's SEC posting also describes a pending $32M settlement regarding the Medicare "date of service" rule (stemming from the legacy Genomic Health company).

The Company has reached an agreement in principle with the United States, acting through the Department of Justice (“DOJ”) and on behalf of the Office of Inspector General of the Department of Health and Human Services, to resolve the previously disclosed civil investigation concerning Genomic Health’s compliance with the Medicare Date of Service billing regulations (the “DOS Rule Matter”).

 Under the terms of the agreement in principle, the Company has agreed to pay $32.5 million plus interest to accrue at the rate of 3.875% per annum to resolve the United States’ alleged civil claims concerning the DOS Rule Matter, subject to negotiation of final terms, approval by the parties and the execution of a definitive settlement agreement. In connection with the agreement in principle, the Company recorded an accrual of $32.5 million, plus legal fees, which is included within accrued expenses on the condensed consolidated balance sheet, as of June 30, 2023. 

The accrual amount is based on several factors, considerations, and judgments, and the ultimate resolution of this matter could result in a material loss in excess of the recorded accrual.


For an interesting but unrelated Genomic Health ligitation, 2009, available on line, involving Medicaid, see Shewry, here.